I'd take the stone to the ceiling, but keep it lighter and quieter than the sample. The fireplace wall is already the room's focal point, and a short surround would leave a lot of navy above it, so the new stone may look added on. With 9-foot ceilings, full height won't feel too tall.

I'd use a slim mantel in warm wood or off-white, not a chunky one, and keep the stone close to the cabinet and crown-molding color rather than yellow-beige. Bring home several large samples and stand them next to the white built-ins, wood floor, current blue chairs and future taupe sofa in daylight and evening light. Some cream ledgestone gets much busier when repeated over the whole wall. If every sample looks too textured, I'd do a simple slab or tile surround instead of stopping ledgestone halfway.

Full stone/brick box to the ceiling.

Would you consider brick instead of the ledgestone? There's something about the stone in the photos you posted that doesn't look great.

I like what you have now better than either of those choices.

IMO ledgerstone should never be in the interior unless for some reason it continues from outside somehow . I love what you have now with your decor much nicer than either of the plans

Changing out the bossy navy the fireplace is painted now for a softer colour would be all that I would do.

I think your present configuration feels disjointed and your renditions do nothing to improve that.

If it were me, I’d put the budget towards a new mantle and decorative shelving above the cabinets.

If interested, maybe look on line for looks that appeal to you and importantly suit your room, dining room and kitchen in your open concept.

Have you already ordered your new taupe sofa? If yes, I wouldn't make a decision re: your fireplace until your sofa is in the room. It would be a waste of $$ to have made any sort of change to the fireplace surround/mantel/over-mantel if the new taupe sofa doesn't work with the stone/tile/paint color you've used.

If you are just considering purchasing a taupe sofa, I would have fabric samples in the room in order to help with your decision re: stone/paint/etc. If the fireplace will be your focal point (which it should be), I would wait to order a new sofa until I had the fireplace wall completed.

I can't tell what the goal is for the room's overall feel. Changing the fireplace to ledgestone would move in a rustic, casual direction, while replacing the leather sofa with a linen one would move in a more formal direction, in keeping with the chairs and existing fireplace. We can't see enough to know which fits better with the rest of your home. Which would you like better?

Here's a rendering that changes the sofa to linen, plus a few other tweaks (the major one being turning on the lights), so you can see what you think about keeping the formality: